April 13, 2009

For years, the convenience store industry has tried to get a foothold in the healthy segment. With good product, merchandising and marketing, the industry — myself included — thought that the healthy segment could be developed.

For the most part, however, retailers found out that while customers talk about wanting healthy products, they just didn’t purchase them — at least not from convenience stores.

Unfortunately, our industry still has to overcome the “gas station stigma” with foodservice customers. In stores I supervised, we had a hard time convincing our customers that buying milk at a c-store was safe. Most of the time, we had longer shelf dates because we had one door and turned the door so quickly. Customers just don’t see our industry as being able to deliver a healthy product.

I think there’s a new opportunity for retailers on the horizon. More than 30 states, cities and counties have laws in place that require restaurants to list calories for any menu item. Last month, the LEAN Act was introduced in Congress, which would require restaurants and grocery store chains that serve prepared foods and have 20 or more locations to disclose calories for each menu item. Smaller restaurant chains and independents would be exempt and would not face the expense of testing their menu items to produce such information.

Early experiences with fine dining restaurateurs in states that require calorie listings show that these upscale establishments have lost customers after listing the amount of calories for each item on their menus. Some restaurants have been forced to modify their menus and others have eliminated items after customers realized how many calories those dishes contained.

It only makes sense that the same results will follow at fast feeders. I live in a county that now requires calorie listing. I usually go to the same quick-service restaurant (QSR) for breakfast each morning, but when I discovered my breakfast burrito has 720 calories, I switched my breakfast choice to Subway.

It’s interesting that one company that could succeed with healthy food, Starbuck’s, has failed at foodservice for the most part so far. The struggling coffeehouse chain is gambling its foodservice future on menu items it introduced in February, such as a reduced-fat turkey bacon breakfast sandwich, lighter options featuring reduced-fat turkey bacon, cholesterol-free egg and reduced-fat aged white cheddar on a multi-grain english muffin. This item’s calorie content stacked up against a QSR’s breakfast sandwich creates a huge menu board merchandising and marketing opportunity. This along with other Starbuck’s food items will grow frequency and customer counts. I think consumers will eventually see Starbuck’s as a place they can go with confidence to eat something healthy for breakfast.

At the end of the day, c-store retailers have the opportunity to compete with fast feeders by developing lower-calorie items, and then merchandising and marketing them aggressively. This will be easier and more effective than competing with organic products, sushi and other experiments that many have tried.